Laura Tyson, a former chair of the US President's Council of Economic Advisers, is a professor at the Haas School of Business at the University of California, Berkeley, a senior adviser at the Rock Creek Group, and a member of the World Economic Forum Global Agenda Council on Gender Parity.

The Business of Business is More Than Business

BERKELEY – Earlier this year, Robert Simons of Harvard Business School fired off a blistering indictment of American businesses and business schools. American companies, he charged, have become softheaded, unfocused, and uncompetitive, in part because business schools are persuading them to embrace a long list of gauzy, feel-good values, such as social responsibility, environmental sustainability, and inclusiveness.

Reviving a famous broadside by Milton Friedman back in 1970, Simons argued that a company’s only mission is to “compete and win.” Friedman, too, maintained that anything except making money is a distraction.

It is difficult to deny the appealing simplicity of this argument. Who would deny that companies have a clear responsibility to earn profits for their shareholders, or that most shareholders invest primarily to make money, not to make the world a better place? Why make things more complicated?

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